Stalking the Next Gold Nugget

Stalking the Next Gold Nugget

I am going to describe how an expert would use levels of thinking in an applied prediction situation such as to find gold nuggets.  The approach would just as easily apply to evaluating the potential of a property for mining operations, though I assume most of us would be happy to find the next nugget. 

Prediction of anything consists of using two different extreme approaches in a blended combination.  As extremes, they can be described as intuitive on the one hand, in contrast to logic and the scientific method, on the other.  All prediction as we normally think of it, consists of this blend, even when you are watching the presentation of the weather forecast on the evening news.  The extremes were even described differently by the ancients.  The language term Vaticinator from the Latin meaning to divine, perceive intuitively, augur, or use mystic knowledge, is the better definition for prediction in the absence of physical data.  Praedictum from the Latin is the language term meaning prediction or foretelling of future events, which applies to the presence of physical data.  There is an important fundamental distinction between prediction and forecasting as used in science, and intuition and prophecy, which we often associate with the paranormal or religious.  Nevertheless, some combination of the two extremes is usually the basis of most good prediction and, therefore, prospecting.

All science based prediction has general fundamental assumptions and principles that are straightforward.  All prediction is determined by the measurable characteristics of the variables under study, and their interaction with the environment, during a specific time boundary or episode.  All prediction involves assumptions regarding the underlying nature of the variables, and what happens that is relevant during the duration of the time envelope.  You need to have an observable database for the scientific method to work. 

So, prediction as the term is used herein uses a data base of at least one prior data point of same or similar information to that which is to be the target of our effort.  To find the next gold nugget you must have first found a previous one.  The information of the data base is collected by our senses.  The information is manipulated according to the rules of the scientific method, evaluated statistically, and the validity is judged according to the laws of valid reasoning to produce a specific target value for a specific point on a time horizon.  That may seem like a long and pedantic description, but it is necessary to be unambiguous as what we are doing.  Praedictum is the descriptive title for such prediction where there is a data base.  The data base consists of the assignment of numbers or numerals to objects or events according to rules. 

Accordingly, there are five theoretical levels of such prediction.  Each has merit.  At Level 1 Theory, I assume that the best measure of the variable I wish to estimate at the next time horizon will be the observed measure defined in terms of operations used to measure it at this time horizon.  The environment is assumed to remain stable.  Inferences are minimal and short term.  There are no statistical assumptions made regarding either the measure or its environment.  Prediction quality is threatened by any change in either the measure of the variable or the environment.  This Level 1 Theory of prediction does not tell you when to expect a change in environment or what the effect will be when you detect the change.  Remember, even a single trend analysis is not possible with this Level 1 Theory strategy.  Even so there is some evidence for at least some stability of prediction across time.  Also, there are times when the environment is consistent and Level 1 Theory is as good as any other.  A great deal of prediction is of this sort.  It often works because in a short time episode there is a lot more orderliness and inertia to the universe of experience than there is randomness.  So, where you find one gold nugget is assumed to be the best place to look for another.  Whatever your method, pan, dredge, or metal detector, just keep doing what you are doing and in the same place.  Because more exciting things are possible, it leads us to the necessity of considering the next higher level of predictive theory.  That would be Level 2 Theory, the Actuarial.

Level 2 uses a multiple sample data base of related information and typically a statistical model.  At Level 2 Theory, I assume that the best measure of the variable I wish to estimate at the next time horizon can be inferred from the most recent trend of the data base of the observed measure of it during the most recent time episode.  It is the stuff for example of financial technical analysis as in the estimate of a future stock price based on the trend of the last 10, 50, and 200 day moving averages.  You accept the underlying assumptions of a statistical test, such as the method of linear regression forecasting analysis, and you thereby derive a linear estimated value for the criterion.  The environment is assumed to remain stable.  Inferences are short term and based on assumptions of an underlying distribution for the measure and a statistical model is used to formulate the estimate.  Prediction quality is threatened by the validity of the assumptions underlying the measure’s statistical data base and environmental turbulence. 

So, where you find one gold nugget and soon another, you assume the next will be along the same stream course but up or down you are not sure until you collect multiple samples that establishes the trend.  Level 2 Theory requires much more work than Level 1 did, but it has many benefits that make it worthwhile.  It also can introduce diversions that can be a trap of your time.  It can be interesting to look at graphs and charts and do statistical analysis.  Typically, we have been taught we have to do those things.  There is no question but that we increase our understanding many orders of magnitude when we reach to use fully the opportunities afforded by the expanded data base and theorizing.  The main benefit is to see the growth in understanding that is occurring.  The main problem is the statistics.  The formally educated prospector knows all the statistics but the amateur rarely knows even all the possibilities.  Not to be discouraged.  You do not have to know everything right away.  Let us see what else is available. 

Level 3 involves constructs.  With a construct, you combine several concepts of related information to derive a common essence.  You then make an estimate of the value of the essence as it is expected to manifest itself in a future setting.  For example, virtually all employment hiring, training, and assessment is of this sort.  Constructs are like the Ten Commandments.  There are only a few ideas and they are meant to cover the full range of correct behavior.  In employment settings, getting along with others, being motivated, and a good scout are generally assumed to be of importance in holding a job in almost any structured work setting.  So, interviewers look for indications of the presence of these constructs in applicants. 

Clustering of information into constructs is the procedure that defines Level 3 Theory.  Finally, we have broken with the constraints of dealing just with a single data set and extending our inferences only to settings essentially similar.  We have also freed up the time dimension.  Now we can go beyond the immediate data and develop some understanding of our world.  We are still holding with the same criterion, find a gold nugget, but we will try to understand what makes the nugget lay where it is.  We could draw several solid conclusions from what has been said.  You should actively collect information about the areas you would consider for prospecting.  There is no one piece of information on a location that can stand alone as a predictor of its nugget finding merit.  The potential search environment is in apparent garbage can chaos.  There is some hope of bringing sense to it by imposing our constructs of meaning.  Proceed with an examination of locations by a careful analysis of the constructs you consider most meaningful to you, and apply a multiple cutoff strategy.  The minute a location did not pass a hurdle eliminate it from further consideration for your search.

Note that at Levels 1 and 2 Theory you do not care about any of this.  At those theory levels you only care about where in the immediate area to find your next nugget right now.  If you are going to describe and analyze the location to get a better understanding of what it does for prospecting purposes then you need the information in the constructs.  They can be considered to be sub-constructs.  The overall construct would be prospect worthiness provided the analysis was carried into a comparison against some absolute standards and against peer geographical locations in the same area.  In modern times there is an effort to get a much better picture of the location for prospecting purposes because just focusing on the one or two direct prospecting related constructs has given an incomplete picture of the historical data and then there have been negative surprises that can effect the experience.  Prospectors can lose a lot of time and perhaps loss of opportunities, so more effort now is put into trying to get the more complete picture.  These sub-constructs are not all equally easy to measure.  Availability of a flowing stream for dredging is easy to find on a map but does not matter for much by itself.  It is the interpretation we give it that is important in the context of the total prospecting experience.  The assay value of a collection of sands is really important but would be hard to get on the spot.  It is an old problem.  The point is that what you can get from a study of constructs will give you a better picture than the focus on just one or two bits of information that are easy to collect.  You want to know what location will be successful going forward.  The approach provides a framework to start a description. 

Stepping back a pace, I would have selection definitions for locations I would consider for prospecting.  At this point, I have just narrowed the number of acceptable candidates for prospecting to locations in which I would probably like to search and in which I would be willing to conduct operations on a daily basis.  Evaluation will always be an amalgam of qualitative and quantitative measures where the location has to meet minimum specifications.  If I do not see anything I like, after applying these screens, I would just continue looking for another location.  At least I will not lose my time through careless or unacceptable prospects.  What you are trying to do is to show your thinking about the available prospecting universe, which you will cleave into units for your own understanding.  To find your next gold nugget by this approach you would remember that gold is very heavy compared to the other materials around it and you would look for places where heavy things should settle.  Obvious places are around boulders in a fast moving stream, around the bend in a river, closer to the bottom of the stream than around its banks.  That is where your next gold nugget should be.

At Level 3 Theory, I assume that the best measure of the variable I wish to estimate at the next time horizon can be inferred from observing the association of closely related measures during the most recent time envelope of relevance.  The environment is assumed to remain stable.  Inferences are generally short term but the time horizon can be increased depending upon the stability of the observed variable’s interrelationships with its closely related measures, the robustness of the statistical assumptions in the techniques used, and freedom from environmental turbulence.  The impatience and other character issues of the prospector can threaten prediction quality.  Maybe we can do better if I kick the theory up a notch to Level 4.

Level 4 changes the landscape.  You do your homework before you get in the car to drive to a location.  This level of thinking looks away from the predictor data base where you found the last gold nugget, and considers environmental changes and new opportunities.  In the world of finance for example, under a high inflation scenario, a particular financial instrument, such as government bonds, might be expected to be of less value than under a low inflation scenario.  Gold however might be expected to respond differently.  Two or more separate estimates are now required, each for the predictor’s history of performance under contingent environments, before we can estimate the expected values of the criterion at the time horizon.  Tell me your estimate of the future environment and then predict the expected performance of the variable based on its past experience record in that environmental context. 

You can see that with Level 4 thinking you have to be generous in inventing possible scenarios.  Then investigate the variable’s performance under those separate environmental conditions.  Judgment of scenario probability now becomes an issue.  If you think a high inflation scenario is the much more likely you should weight your investment portfolio more in that direction.  The point is that you need to look to the environment before making the prediction where the gold nugget should be.  This means looking at a map before you start.  Pick your geographical location before you even look for the first gold nugget.  You might select a location where gold has been extensively mined in the past and there are tailings shown on the map from abandoned mines.  Perhaps when the market or governmental regulation changed, the marginal productivity of the mine dropped below payback for commercial level of operations.  Of course, for the hobbyist the tailings might be good pickings because his or her economic needs and scale of operations are not the same. 

In Level 4 Theory I assume there are many different possible tomorrows.  The environment is assumed to be unstable and now becomes the major focus of attention.  Therefore, I need to know how the variable I wish to estimate at the next time horizon, inferred from observing the standing and relationship of closely related measures, has performed under different environmental circumstances during the same or similar episodes in the most recent past.  The best measure of the variable I wish to estimate at the next time horizon is a joint function of the construct variable’s stability and the environment’s freedom from turbulence.  Inferences are to the selected time horizon, which can be very long term provided the judgment is accurate of which environment is most likely.  The personality characteristics of the person making the judgment, such as risk tolerance, will effect the decision maker’s actions toward the measure after knowing the possible choices.  This level of theorizing is threatened by the lack of thoroughness of the researcher’s consideration of the alternative tomorrows and failure to set an appropriate probability for each estimate. 

So, where do you look for the next gold nugget with knowledge of Level 4 Theory?  What time of year do you plan to prospect?  What will the road conditions be?  How high will the river level be when you are there?  How many other people are likely to be trying the same location?  Are you taking the grandchildren for a recreational experience or is this effort to put food on the table?  You learn the importance of understanding your decision style.  Those who do not even know they have a decision style are at a serious disadvantage and you are competing against them with money stakes.  Appreciate the alternative environments that affect a location’s probable success. 

Perhaps another important part of Level 4 Theory is to see the time dimension.  If you set up your alternative location selections and expected alternative criterion outcomes in a table, you see the tradeoffs.  The quantitative techniques get you to massage some numbers, which will slow down your actions.  You will spend a lot more time in paper rehearsals of what-if statements and so have a much clearer understanding of the probable effects of what you are doing.  Eventually you will have a competitive advantage over those who are just drifting.  Probably the greatest benefit to Level 4 Theory is that you understand what you are doing.  You see the tradeoffs and you see what you think will be the optimum for your prospecting effort.  You are getting in control of your search thinking and you understand why you are making your decisions.  The Level 4 Theory makes a specific reference to changing environmental circumstances and its effects on location selection and prospecting effort. 

Let us now go a little further down the path of complexity.  Did I mention that large mining operations change environments and environments change large mining companies?  It is a reciprocal relationship.  So then, what causes all of this to happen? 

Level 5 requires that no less than three related variables be considered in a relationship that is often cyclical.  One of the few solid axioms of prediction research is that variables are systematically and complexly linked in their relationships in a multiple contingency system with redundancy and feedback.  Left far behind is the notion that everything that will exist tomorrow is just a simple linear estimate of what existed yesterday.  The study of at least three variables requires us to consider that each result is in itself now a cause of something else, which eventually feeds forward to become a prior of whichever variable we first considered for examination.  The truth is that we live in a world that rarely stays linear for very long.  At this level, we have to bring in everything we know about the science of gold getting.  We study maps to see where ancient streambeds existed.  We look at geologic maps for the known location of quartz veins.  We look for evidence of patented mining claims.  We consider whether we will need four wheel drive access.  Can we get a mechanical shoveling device in there? 

Behind a prospecting effort, there is usually the attempt to collect information that is important, accurate, and relevant from trusted sources.  The type of important information that needs to be collected relates often to the potential negative considerations: Can you enter the area and prospect whenever you like?  What are the fees and tax consequences?  Can you back out of a deal?  These are only some of the concerns that are seen by many as key questions to be considered in evaluating location alternatives.  We can also see the trade-offs that large mining companies experience in trying to maintain their sales forecast.  The sales forecast drives everything else in the company.  It is where the tire meets the road.  Nobody has a job until somebody sells something.  There are many factors outside the company’s control that can influence its fate; just the same as for you.  We consider the effect on prospecting of changes in the economic cycle that sends more prospectors into the field and examining more marginal properties.  We consider the most likely governmental intrusions.  Everything is brought together into a worldview of geological activity.  It is a lot of work if you do it right. 

At Level 5 Theory I assume all variables maintain their relative position in a quasi-stationary equilibrium with the other variables within its framework in an interdependent system.  There is a constant interaction of deviation amplifying and deviation counteracting influences on the quasi-stationary equilibrium of all variables operating in the framework that is sometimes referred to by other names such as a logical- mathematical- structure.  Any variable noticed and then selected for examination is changed by our observation and manipulation of it, and those variables with which it interacts in turn readjust in feed forward influences to affect the original variable.  A cyclical system of a constantly readjusting state of nature is the assumed model.  Long term inferences are possible depending upon the stability of the observed variable’s interrelationships with closely related variables in a framework of interacting influences, and environmental inertia across a time episode.  Accuracy of long term inferences depends upon vigilance in monitoring the important interactions within the system.  Prediction quality is threatened by any limitation in the researcher’s capacity to monitor the exhaustive list of contingencies and linkages that influence the most important variables under study. 

Level 5 Theory shows us why dredging operations interface with fishing regulations and even water quality issues.  We can see why mining as an industry is not going to go away.  It is well connected with the interest group triangle, it maintains itself in a quasi-stationary equilibrium with the entire economic system.  We can see why the discovery and processing of minerals will continue to have a promising future.  Demographically we all will want those products that help us to maintain a quality lifestyle. 

The direct effect of Level 5 Theory on your prospecting is to tell you what to study about the location before you enter it, or decide to buy a location, and how to monitor the success of your operations during the holding period.  So where is that different from where you were at Level 1 Theory?  Probably your level of understanding has changed but the location of the prospect may not have. 

Prospecting decisions probably require much more analysis than you had expected.  Time and financial resources are the major variables.  You need the time to devote exclusively to the matter, as you would need to be successful in anything else.  There is no magic.  The amount of resources you have to invest determines the scope.  The more resources you have the more you can protect yourself against the various sources of risk.  You have to be attentive to details.  If you buy a location it must be sufficiently noteworthy that someone else will want to buy it from you when you want to liquidate your position.  The formula for success is to buy something that someone else will want. 

If you have been keeping all of your work in some sort of a permanent physical record about a specific location, and if you have conducted the theory level analyses parallel to where you were going through this material, by applying each level of theory in turn to the location, you would know quite a bit about that prospect by now.  If you still want to search in a particular location you would probably feel pretty good about the deal.  You would at least know exactly why you were there.  You would know what to expect in a realistic way about how the location should perform.  You would know when to expect a result, and what conditions would cause you to leave.  You would understand what the alternatives are.  That is a lot more than most people know about their locations.  If you do this activity, you will probably be in the top few percent in preparation of those nonprofessionals who prospect.  You will be more confident, no question about it.  You will probably be more accurate too because you have found the negatives in the location that would cause a change in your activities.  It is hard for prepared people to waste time and money because they enter the arena carefully, pick their activities carefully, and take the steps to cut losses when things do not go right.  You will never take a really big loss and that alone will separate you from most of the amateurs and professionals. 

The presentation and discussion of the material on data based methods of prediction shows that the field is sufficiently developed to allow for reasonably accurate prediction for finding prospect locations.  Professionals use these methods all the time.  Understanding the data based methods can also get you further down the road to understanding its limitations.  Predictions are based on public information.  Anyone who follows the same rules will get the same answer.  There is no magic.

Now we come to the part about intuition and its major role in site selection.  There is the restriction for many treasure seekers that a location and its individual components has to pass a smell test, an eye test, and a feel test.  It has to feel right not just look right, but it still has to do that too.  You have to feel comfortable about it so you can sleep at night without being concerned whether you have made the right decision.  We need to address the constraints that may restrict some alternatives.  For example, there are some people who do not care how likely a prospect is if it has anything to do with a sacred site, they will not have anything to do with it.  There are also people who have very strict views regarding pollution free methods, which must be acceptable to them.  These are intuitively meaningful issues.  They are not the stuff of science.  For the people involved, they are more important than science.  The failure of the so called science based methods to be inclusive of all your concerns does not mean you do not use them.  It means you need to turn somewhere else for the information you need to supplement your monitoring effort.  It is not going to be another person. 

Here we turn to the development and use of intuitive information.  You had it within you all along.  It is in your God given intuitive nature.  You had it all along as shown by your ability to come up with suitable estimates for making some of the decisions in the data based material.  You used it to come up with creative solutions and to build a model of feedforward and feedback influences at Level 5 theory.  Every time you had to express an opinion or make a judgment without sufficient data, you were depending upon your intuitive nature.  We will not dismiss what we know about data based methods of prediction, but we will see them in their proper perspective.  Ultimately you will be using a blend of the data based methods when they are appropriate, under the umbrella of a morally guided intuition. 

A comprehensive study of intuitive and impressionistic methods of gathering information gives a fuller understanding of the field of prediction but it also gives a more complicated one than just sticking to objective data if such a thing really would be possible.  If we reflect back on the so called objective methods we can see that they all had a substantial dose of intuition but it was hidden.  So, after we have examined the evidence for both impressionistic and objective methods of gathering information and synthesizing it into a map of our most likely future, what are we to make of all of this?  Can we all learn to predict better the location of prospects?  Can we be more successful within the definition of the terms and the methods of study presented here?

Intuition requires you to be still and relax a lot.  Because of the long history of intuition and prophecy from many sources it is easy to get definitions mixed and we need to keep the terms straight.  The religious prophet described in sacred texts of old was wise and spoke well but he was more than just a social critic or fortune teller.  The prophet, or in some cultures called the shaman depending upon the cultural group represented, was divinely inspired.  It was the divine inspiration that was the legitimization of the prophet’s or shaman’s pronouncements.  You can be inspired too.  The nature of prophecy was either inspired by visions or auditions, or acquired by learning certain techniques such as sitting alone and not being caught up with all the data of the world. 

This is in marked contrast with the scientific methods that required you to think really hard about all the data and to reach a decision.  The goal of learning techniques is to teach how revelations can be received.  Even religious scholars believed that prophecy, though it was a gift from the world beyond, still required some knowledge.  In discussions of the nature of truth, it was generally held that reason alone was necessary but insufficient.  Prophecy or what I am calling here intuition could supply what was missing.  It is important to note that scholars usually asserted that prophecy could not be acquired by human preparation or effort alone.  When the people of olden times needed the prophet most was when they were not listening to that little impression inside of themselves telling them they were wrong to do something but they went ahead and did it anyway.  When people are most wrong is when they need the most correction.  But, that is also when they are not listening either to the voiceless feeling inside or to the prophet speaking to them from the outside.  It was a thankless task, prophecy was.  When the prophet corrected them they did not always take it well.  Sometimes they reacted in nasty ways.  But, I do not want to start preaching.  For now appreciate that we have our definitions straight.  We see the point of inspiration.  If you live right, and do not get caught up in your own ambitions and turn your conscience off, you can get inspirations too.  We can retool our use of that intuition, but we have to be of pure motive and practice some skills that have been neglected such as sitting quietly once in a while. 

Our English word intuition is from the Latin intueri, to look into.  It is the term that describes both an event and a feeling that accompanies the event.  The event is the process of immediate comprehension of a fact or the immediate realization of the relationship between a fact and a result.  As in the act of creativity, an ah-hah exclamation and a flash of biological light often accompany it.  The material may come from either our senses or our intellect but it is more likely a combination.  All our knowledge has its intuitive experience.  It is probably in the creative task, especially one we have never experienced before, where intuition is most evident.  If we see a solution that was never there before, it is from intuition.  The experience of intuition is a personal form of prophecy.  It is personal; you need tell no one else.  The activity is so important that we could not live our lives without its use.  As we appreciate its importance and do what we can to facilitate the experience, we will grow in its effective use.  You should do all you can to promote more intuitive experiences.  Some philosophers say that we cannot know things as they are in themselves, but only as they appear to us.  Thus, what we might consider to be rational knowledge is really very subjective.  In our knowledge of nature, we start from observation, but observation remains fruitless if it is not eventually verified by a series of inductions and deductions.  Intuition furnishes us with the elements of all scientific and philosophical speculation.  Some philosophers attempted to understand intuition as the fundamental element of our ability to acquire knowledge.  Most philosophers start from the principle that human reasoning is unable to give us knowledge.  Intuition alone is able to put us in communication with reality.  They believe it is only through intuition and internal experience that we can acquire knowledge. 

You can use impressionistic methods and nonobjective data sources, to obtain a vision of the future, for the purpose of finding gold nuggets.  Some see intuition as a nonscientific approach to information gathering, confirmation, and verification.  Please note intuitive methods are far more extensively used than the scientific and objective methods.  Have you ever been to a doctor?  When he asked you how you felt, how scientific was that?  Ever walk into a situation and feel scared and not know why?  Ever think about your situation and know something is not right about it but not know exactly what?  How scientific were those situations?  Yet, they were very real to you.  They required a decision be made and there are very real consequences.  Most of the decisions we make in life, certainly the most important decisions, are largely charged emotionally and are ultimately impressionistic in nature.  We depend upon our impressionistic feelings and often put a good deal of trust in them even if we do not know exactly why we are feeling a particular way.  Impressions are first.  They are immediate and have an emotional content.  Do not turn your fear button off, the sergeant used to say.  Learn to listen to it.  Well said. 

With vaticinator we have no data base as such.  The target of our intuition may be a first observation.  The source of the information may be a dream, a thought carried on the wind, or a feeling accompanied by thoughts during our waking hours about something that might occur or might be found.  It is not generalized.  It is a specific thought or vision that is accompanied by a specific object or event possibly at a specific point in time.  The time horizon may be the immediate present or some indefinite future time and place.  The event envisioned might be manipulated by our intellect and subject to our evaluation of its probability, but if there is uncertainty of the time horizon it might make validation impossible.  Very little is known technically about how intuition works.  Often, because of the uncertainty of the time horizon, there is a difficulty of discerning true from false intuition.  There are some hints.  The true intuition will tell you what to expect right now and how to prepare.  If I was walking along a stream bed and got a very meaningful urge to dig right there, I would dig. 

Summary

Success in your search depends upon the accurate application of the level of prediction appropriate to the opportunity.  So, start somewhere, operate small at first, and go slow initially.  Pick locations with promise to start your search.  Do the required research on them and keep track of all of your notes.  Watch how your notes on them change over time.  If you become the historian on the location, you will also become a wise predictor of the probable success of that location.